Analyzing the Effects of Car Sharing Services on the Reduction of Greenhouse Gas (GHG) Emissions

sustainability Article Analyzing the Effects of Car Sharing Services on the Reduction of Greenhouse Gas (GHG) Emissions Jiyeon Jung 1 and Yoonmo Koo 1,2,* 1 Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea; [email protected] 2 Graduate School of Engineering Practice, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea * Correspondence: [email protected]; Tel.: +82-2-880-2269 Received: 7 February 2018; Accepted: 9 February 2018; Published: 17 February 2018 Abstract: This study examines the environmental impacts of roundtrip car sharing services by investigating transportation behavior. Car sharing should contribute to reduced greenhouse gas GHG emissions; however, such schemes include both positive and negative environmental effects, including: (1) reduced CO2e (carbon dioxide equivalent) from substituting private vehicle use for more fuel-efficient car sharing vehicles, (2) increased CO2e as car-less individuals switch from public transit to car sharing vehicles and (3) reduced CO2e due to fewer vehicles. This study examines the impacts of this modal shift on greenhouse gas (GHG) emissions using three types of models: a mixed logit model to analyze car sharing service preferences; a binary logit model to analyze whether individuals are willing to forgo vehicle ownership or planned purchases to use car sharing services; and a linear regression to determine how much private vehicle or public transportation use would be replaced by car sharing and the resulting effects on mobility. Total emissions from the current car sharing market equal 1,025,589.36 t CO2e/year. However, an increase in electric vehicle (EV) charging stations to 50% of the number of gasoline-fuel stations would increase the probability of electric car sharing vehicle use, thereby reducing emissions by 655,773 t CO2e. This study shows that forgoing vehicle purchases does not offset the increased GHG emissions caused by the shift from public transportation or private vehicle use to car sharing. Keywords: shared-use vehicle; greenhouse gas; sharing economy; collaborative consumption; sustainable transportation; discrete choice model 1. Introduction Automobiles have long been considered to be a private means of transportation. However, with the introduction of car sharing services, cars can be rented on an “as needed” basis for as little as 10 min [1]. Car sharing also allows individuals to benefit from vehicle use without the fixed costs and responsibilities associated with ownership, because maintenance, repairs and insurance costs are included in the car sharing tariff [2]. Car sharing is evolving as a more flexible service, with one-way trips and delivery services. Roundtrip car sharing requires one to return to the designated station from which the car was rented. However, one-way car sharing allows one to return a car to a different station than the one from which it was rented [3]. This type of delivery service, which delivers the car sharing vehicle to the desired location, launched in 2017 [4]. The car sharing market has experienced rapid growth, because it provides a flexible, alternative mode of transportation. According to Navigant Research, the global car sharing market was valued at USD 1.1 billion in 2015 and is expected to grow to USD 6.5 billion by 2024 [5]. The car sharing market in South Korea is also growing rapidly, from KRW (US dollar equivalent as of January 2017 is USD 1 = KRW 1185 [6]. However, for ease of Sustainability 2018, 10, 539; doi:10.3390/su10020539 www.mdpi.com/journal/sustainability Sustainability 2018, 10, 539 2 of 17 calculation, this study used USD 1 = KRW 1000.) 600 million (=USD 600,000) in 2011 to KRW 100 billion (=USD 100 million) in 2016 and it is expected to reach KRW 500 billion (=USD 500 million) by 2020 [7]. As a solution to the societal problems of air pollution and heavy traffic congestion, many countries, states and cities provide support for car sharing services. Washington State in the U.S. offers tax credits (up to USD 60/employee/year) to employers who use car sharing [8]. Furthermore, the District Department of Transportation exempted car sharing vehicles from paying to use metered spaces [9]. Thus, car sharing is an especially attractive transit option in congested cities. Seoul has suggested various policies to reduce the volume of private vehicle traffic and foster car sharing. In September 2012, the mayor declared Seoul to be a sharing city, initiating various policies to support Nanum-car, Seoul’s car sharing service. First, shared-vehicle providers were given a 50% discount for public parking lot spaces. Second, providers of electric vehicle (EV) sharing services were given subsidies towards the purchase of electric vehicles: KRW 15 million (=USD 15,000) from the city and KRW 15 million from the national government. Additionally, free installation was provided for normal-speed EV chargers. Third, a policy for integrated transfer discounts on the public transit system was implemented. Members using public transit for journeys of less than 30 min to reach a car sharing station receive an average discount of KRW 300–1000 (USD 0.3–1) per use [10]. Within the transportation sector, the sharing economy is emerging as a solution to urban problems of traffic congestion and excessive consumption. Such measures are gaining increasing attention and support, especially with increasing concern over environmental issues. However, as car sharing services can affect individual’s travel decisions, consideration should be given to behavioral changes resulting from this alternative mode of transportation. People who would otherwise have used public transport might instead choose to drive a car sharing vehicle. Such analyses should consider the individual’s travel activity and change in mode of transportation. This study examines the effects of car sharing services on greenhouse gas (GHG) emissions by considering changes in travel mode, mobility and decisions on vehicle ownership. The remainder of this paper is organized as follows. Section1 reviews the literature on car sharing. Section2 outlines the data used in this study and presents the methodology used to analyze the demand for car sharing services and the resulting environmental effects. Section3 discusses the environmental effects of car sharing on GHG emissions and Section4 presents the conclusions and implications of this study. Revealed preference (RP) methods are commonly used to examine the actual market share of a product. However, this approach has shortcomings when analyzing the demand for a newly revealed product, or when investigating unobserved consumer behavior. Thus, stated preference (SP) methods are commonly used to analyze unobserved behaviors, such as non-selection of a product or a preference for unreleased products. Specifically, discrete choice modeling (DCM), based on SP data, is widely used to analyze travel choice behavior and identify behavioral responses to chosen situations not revealed in the market. Koo et al. [11] used the mixed logit model to analyze consumer preferences for a new incentive program that used a reward-points card to promote green consumption. Hong et al. [12] evaluated government subsidy policies for a vehicle-to-grid system by examining consumer demand using a mixed logit model. Dissanayake and Morikawa [13] used both RP and SP data to model trip decision behavior and investigated how the preference for trip-sharing affects modal choice preferences. Catalano et al. [14] analyzed the shift in behavior in response to the introduction of carpooling and car sharing at a tourist site in Palermo, Italy, using multinomial and nested logit models. That study analyzed the potential demand for carpooling and car sharing in an area of congested traffic (the tour site area) through a scenario analysis involving imposed parking costs and limited traffic area for private vehicles. Similarly, many studies use SP data to analyze consumer preferences in newly launched products or services or to further estimate the effects of adopting such products or services. Many researchers have analyzed the various positive and negative implications of car sharing, including social, economic and environmental effects [2,15–17]. These include reduced emissions [18], fewer private vehicles [19], reduction in travel distance [20] and increased mobility [21]. Sustainability 2018, 10, 539 3 of 17 Katzev [16] examined various possible impacts of roundtrip car sharing, such as changes in car ownership and mobility. The findings showed that reduced car ownership did not correspond to a reduction in the number of miles of vehicle travel, which increased among non-car owners. Martin and Shaheen [22] conducted a before-and-after analysis among active users of eleven car sharing organizations during autumn 2008, examining the effects of roundtrip car sharing on public transit and non-motorized travel. The results showed slightly negative impacts on public transit use but the magnitude and direction of shifts varied between different car sharing organizations. The reduction in public transit use was approximately equivalent to the reduction in driving or vehicle ownership by other members after joining the car sharing scheme. A further study by Martin and Shaheen [17] estimated the impacts of roundtrip car sharing in North America on net GHG emissions as a result of changes in travel behavior. It included observed impacts (emission changes are physically

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